The annual survey of the fund management industry published by the SFC showed that private banking businesses of registered institutions, such as banks, accounted for HK$4.06trn of the private wealth management assets.
The remaining HK$1.14trn came from private clients, funds of asset management and fund advisory firms and other institutions.
Private wealth assets (HK$trn)
|
|
2016 |
2015 |
2014 |
2013 |
2012 |
|
Private wealth business |
5.20 |
4.78 |
4.60 |
3.65 |
3.60 |
|
Private banking business |
4.06 |
3.67 |
3.11 |
2.75 |
2.68 |
|
Private client funds |
1.14 |
1.11 |
1.49 |
0.89 |
0.92 |
Source: Securities and Futures Commission
Overall, Hong Kong’s combined fund management business grew by 5.2% to HK$18.30trn in 2016, from HK$17.39trn in 2015.
This includes the market capitalisation of Real Estate Investment Trusts (REITs) and fund management businesses, which consist of asset management businesses, private banking business and fund advisory businesses.
Overall fund management business assets (HK$trn)
|
|
2016 |
2015 |
2014 |
|
Combined fund management business |
18.29 |
17.39 |
17.68 |
|
Fund management business |
18.08 |
17.19 |
17.48 |
|
Asset management business* |
12.82 |
12.26 |
12.77 |
|
Private banking business |
4.06 |
3.67 |
3.10 |
|
Fund advisory business |
1.20 |
1.27 |
1.61 |
|
REITs |
0.21 |
0.20 |
0.21 |
Source: Securities and Futures Commission *Asset management businesses comprise asset management firms, banks engaged in asset management and insurance companies
According to the report, the increase in AUM of asset management businesses was mainly due to net capital inflows from new and existing mandates, and the overall positive market performance towards the end of 2016.
On the flipside, the fall in fund advisory assets was caused by a number of terminated mandates.
“Growing wealth in Asia served as an expanding pool of potential customers for the private wealth management business in Hong Kong,” the SFC said.
Overseas investors have been the major source of funding for Hong Kong’s fund management business, accounting for 66.3%, or around HK$12trn, of fund management assets.
Asset management and fund advisory business breakdown (HK$trn)
|
|
2016 |
Market share |
|
Institutional funds |
3.41 |
24% |
|
Other funds |
4.66 |
33% |
|
SFC-authorised retail funds |
1.48 |
11% |
|
Government funds |
1.39 |
10% |
|
Pension funds |
1.32 |
9% |
|
Private client funds |
1.14 |
8% |
|
MPF |
0.63 |
5% |
Source: Securities and Futures Commission
Institutional and other funds, comprising hedge funds, private equity funds, overseas retail funds and insurance portfolios, account for around 57% of the asset management and fund advisory businesses in Hong Kong, according to the survey.
Industry growth
Hong Kong’s asset management industry continues to attract new entrants. According to the survey, the number of firms licensed for asset management (Type 9 licence) has grown by 14.5% to 1,300 in 2016 from 1,135 a year ago.
The number of individuals holding a Type 9 licence also increased by 11.3% to 9,543 in 2016 from 8,527 in 2015. By the end of March this year, the number of Type 9 corporations and individuals further increased to 1,348 and 9,746, respectively.
According to the survey, the participation of mainland Chinese institutions in Hong Kong’s asset management industry continues to grow.
The number and the size of assets of SFC-authorised funds managed by mainland-related fund groups continued to increase last year.
Source: Securities and Futures Commission
In addition, the number of licensed corporations and registered institutions established by mainland-related groups in Hong Kong increased by 15.9% as of the end of March from the previous period.
Source: Securities and Futures Commission
